IRDA Claim Settlement Ratio Health Insurance in India

What is Insurance Regulatory and Development Authority (IRDA)? – Know in Detail

The Insurance Regulatory and Development Authority of India (IRDAI) is an apex body that governs the workings of the life and non-life insurance companies operating in the market.

Every insurance company is required to follow the rules and guidelines laid down by the IRDAI. IRDA also publishes regular reports on the performance of insurance companies. The amount of business done by insurers, their claim settlement ratios, incurred claim ratios, etc. are computed and published by IRDA regularly. Amongst these publications, the claim settlement ratio of insurance companies is very widely used.

Let’s understand what this is.

What is Claim Settlement Ratio in Health Insurance

Claim settlement ratio (CSR) in health insurance is the ratio between the total number of claims received by an insurance company and the number of claims that were settled by the insurer from among the ones received in a particular financial year. This ratio ensures that the insurer is capable of settling claims of its customers.  

For instance, suppose in a particular financial year, 100 claims were filed by different policyholders of an insurance company. However, the insurer settles 97 out of the 100 claims. In that case, the CSR of the health insurance company for the particular year would be 97%.

The formula to calculate claim settlement ratio of health insurance companies = (total claims settled/total claims filed) * 100

What is the incurred claim ratio (ICR) in health insurance?

The ICR or Incurred Claim Ratio calculates the ratio between the total number of claims that are paid by a health insurance company to customers as compared to the total amount collected by the company in premiums in a particular financial year. For example, an insurer with an 88% claim ratio would signify that the company has paid INR 88 in claims for every INR 100 earned as premiums. Thus, the extra INR 12 is the profit earned by the company.

Where can I check the incurred claim ratio of an insurance company?

The IRDAI or the Insurance Regulatory and Development Authority of India publishes the ICR or the incurred claim ratio of different insurance companies every year. Along with the ICR of the health insurance company, IRDAI also offers specific ICRs for various forms of insurance for the customers to check at the time of buying a policy. So, customers can check the annual report of IRDAI to estimate the ICR of health insurance companies.

How is Claim Settlement Ratio Calculated – CSR Calculation of Health Insurance Companies

The claim settlement ratio of an insurance company measures the proportionate claims which the company has settled from the total number of claims made on it in a financial year. The ratio is calculated using the following formula -

Health Insurance Claim Settlement Ratio = (total claims paid by the company / total claims made on it) * 100

The ratio is expressed as a percentage. Higher the percentage the better are the chances of the claims being settled by the insurance company.

IRDA Health Insurance Claim Settlement Ratio

IRDA also publishes the claim settlement ratio and incurred claim ratio of health insurance companies. The ratios are calculated and published at the end of each financial year. The ratio shows policyholders the probability of their health insurance claims being settled.

Since health insurance policies are important and have also become quite popular, a potential customer can judge the performance of a health insurance company based on the claim settlement ratio published by the IRDA. This makes choosing the health insurance company easy. It helps customers make informed choices.

There are more than twenty health insurance companies in the insurance market. Comparing and selecting the best insurer, therefore, becomes quite difficult. However, with IRDA’s health insurance claim settlement ratios, this comparison becomes easy. Individuals can choose a company after choosing the best health insurance plan and then comparing the claim settlement ratios.

Importance of Checking CSR or Claim Settlement Ratio of Health Insurance companies 

Below are some points that show the importance of the CSR in health insurance:

• CSR allows the insured to know the ability of the company to pay claims
• It serves as an effective metric for comparing different health insurance companies
• It allows customers to look at the reliability of insurers in terms of their claim-settling ability
• CSR is an excellent method to measure the consistency of a company

IRDA Claim Settlement Ratio Health Insurance Companies

Health Insurance Company	Claim Settlement Ratio 2022-23	Cashless Hospitals
Care Health Insurance Company	95%	9,592
Niva Bupa (formerly known as Max Bupa) Health Insurance Company	96%	8,701
Star Health Insurance Company	90%	11,035
Aditya Birla Health Insurance Company	94%	8,787
DIGIT Health Insurance Company	96%	5,479
Reliance Health Insurance Company	100%	8,014
Royal Sundaram Health Insurance Company	89%	8,332
Oriental Health Insurance Company	89%	2,716
Liberty Health Insurance Company	94%	5,552
Future Generali Health Insurance Company	92%	6,303

 

Health Insurance Companies Claim Settlement Ratio

Below are the Claim Settlement Ratios of insurance companies in India:

Health Insurance Company	Claim Settlement Ratio (2021-22)
Care Health Insurance Ltd.	100
Aditya Birla Health Insurance Co. Ltd	99.41
Acko General Insurance Ltd	97.2
Bajaj Allianz General Insurance Co. Ltd	96.59
Go Digit General Insurance Ltd.	96.09
HDFC ERGO General Insurance Co. Ltd.	98.49
ICICI Lombard General Insurance Co. Ltd.	97.07
ManipalCigna Health Insurance Co. Ltd.	99.9
Niva Bupa Insurance Company	99.99
SBI General Insurance Co. Ltd.	95.04
Star Health and Allied Insurance Co. Ltd.	99.06
United India Insurance Co. Ltd.	97.25

Health Insurance Claim Settlement Process

The claim settlement of health insurance companies takes place in two ways. They are the cashless claim process and the reimbursement claim process. 

Cashless Claim Process – Cashless claims are filed when a policyholder avails treatment at a network hospital of the health insurance company. Here are the steps to file the claim:

• Claim Intimation – In this step, the policyholder has to inform the insurance company or the TPA within 48-72 hours of hospitalization via a call or email. If it is an emergency case, the insurer should be informed within 24 hours of getting admitted   
• Documents Approval – In this step, the insured has to show the health card offered by the insurance company and ID proof to the network hospital which will examine the same. Once done, the hospital will submit the pre-authorization form to the insurance company  
• Claim Settlement – Here, the insurer will check the authenticity of the claim and share their approval. Once the treatment is over, the insurer will pay the bill to the hospital directly 

Reimbursement Claim Process – These claims are filed when the policyholder chooses a non-network hospital to get treatment. Here, the policyholder has to pay the hospital bill from his/her pocket at the time of discharge and later can submit the claim of reimbursement to the health insurance company. Here are the steps to follow:

• Claim intimation – The insured must inform the insurance company about getting hospitalized within the required timeline mentioned in the policy document. Keep the bills and other relevant documents safe as they will be required while raising the claim
•  Document Approval – Submit the documents together with the claim form for the insurance company to review 
• Claim Reimbursement – Once all the formalities are done by the insurer in terms of checking the documents etc., the claim is settled by the company by transferring the amount to the registered bank account of the policyholder

Required Documents for Claim Settlement

Below are the documents required:

• Claim form duly filled 
• Medical certificate/diagnostic reports 
• Policyholder’s ID proof
• Prescriptions and cash invoices
• Copy of FIR (in case of accidental case)

How to Check Health Insurance Claim Settlement Ratio

You can check the IRDA health insurance claim settlement ratio of companies by the below process:

• By checking the annual report released by IRDAI every year which mentions the claim settlement ratio of the health insurance companies
• By visiting the official website of IRDA

Make a list of the CSRs of different health companies and compare them to check the company with a high claim settlement ratio. Buy the best plan from the best company with the best CSR.